I would love to hear your thoughts on Charleston, SC

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I would love to hear your thoughts on Charleston, SC

Nat C.
Investor · Miami, FL · Member since 2013 · 807 posts · 475 votes

I would like to know who here is investing in Charleston, SC?

I owned a house in downtown Charleston years ago and I now regret selling it. I don’t think it’s possible to find any deals on the peninsula now days.

West Ashley presents some lower priced properties within good proximity to downtown.

The areas where I think a deal can be had are in the North Charleston area. Specially The Neck is the area I see gaining the most appreciation. You can still pick properties up cheaply here and I forecast it will undergo gentrification in the coming years.

Further up, I think there’s good deals to be had in the outskirts of Park Circle and anything close to Amazon office and Charlestowne Square.

There are vast areas of North Charleston in the Opportunity Zone, so we will see a lot of development and money poured in.

There’s a number of large companies based in Charleston and it has a strong manufacturing and aviation sector. Statistics show that 43 people per day are moving to the Charleston area. I believe this growing economy is a good place for investment.

I would love to hear others thoughts.

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John Semanchuk
Charleston, SC · Member since 2013 · 380 posts · 157 votes
6y

Just a few added thoughts... Taxes on non-owner occupied property in Charleston County will be approximately 3x the amount of owner occupied properties.   There's a simple calculator here that will give you a close estimate of what to expect: 
https://www.charlestoncounty.org/departments/auditor/tax-estimator.php

Just input the tax district (from tax records) and your purchase price.   Then choose the 6% assessment ratio and you will get an idea of what to expect. (choose the 4% ratio to see the difference)  

Berkeley County has a similar estimator

https://www.berkeleycountysc.gov/drupal/dept/auditor/estimator

As for flood insurance, the only difference between owner occupied and non-owner occupied rates, is $225 additional fee that FEMA adds on. Otherwise costs should be the same for any NFIP insured property. It's important to have an elevation certificate for an accurate quote from an insurance agent. There is also private flood insurance available (ie; Lloyds of London) and if your flood quote is high, it's worth looking into.

FEMA is supposedly implementing changes to the current flood maps this year and that may change the flood zone designation for any given property. They've been telling us that the change is coming for years now, so don't hold your breath, but it's important to know how a property might be impacted. You can download the preliminary maps from FEMA's site to see what changes may or may not happen. :-/

Even if you don't have a mortgage and choose not to buy flood insurance, it's important to be aware how much flood insurance costs can impact the value of your property should you ever choose to sell.  

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  • Rich Hill
    Member since 2019 · 17 posts · 3 votes
    6y

    I owned a rental property on James Island for several years and was fairly disgusted with it compared to rentals I own in GA, WV, VA, and AL:

    Flood insurance is terrible. FEMA doubles the rate if you are a landlord and if you sell, you get none of that additional amount back. I will never buy another rental in a flood zone. It started around $350/150k house per year and finished around $1.4k/year for the same house value. You cannot cancel or change the coverage.

    My property taxes doubled once I converted the house from a single family that I lived in to a rental.  So do not analyze property taxes without fully understanding the hit they take once you lose the homestead exemption.

    0Reply
  • Troy GandeeBusiness Member
    Real Estate Broker · Charleston, SC · Member since 2013 · 794 posts · 454 votes
    6y

    Hey @Nat C.. You were probably wise to sell your downtown property when you did. The number of new apartments and developments downtown has shocked the existing inventory. We saw a HUGE spike in values downtown like 4-5 years ago, but they've been dropping the last year and a half or so. A lot of landlords have had to severely drop their rental rates to get tenants because they're now competing with huge complexes with parking, bikes, gyms, restaurants and even turn down services.

    The rest of of the City of Charleston is more affordable than downtown, but it's still a highly competitive market, so getting a good deal takes a lot of hunting. Because there are 43 people or so per day moving here, our inventory is pretty stretched across the board. While that does make for a good tenant base, it also means high prices. Most of the good deals come with a lot of deferred maintenance. North Charleston is where the cash flow is the highest, but has some socio-economic issues, so neighborhoods can vary significantly from mile to mile. You just have to be wise with what you purchase and usually have to move really quickly.

    And I would be hesitant to mess around with our Opp Zones too much. Not much has been picked up yet. There's one local developer who is also a State Legislator doing some cool stuff, but he's local and knows the area. Any of these out of area developers looking to wash their gains will have a difficult time with the fabric of the areas and the fact that land is limited or was previously industrial. The cleanup alone is staggering on that dirt. Plus, we all know they're going to wash out their gains and then leave these areas high and dry. They're just doing to leave a vacuum when they get out. 

    2Reply
  • Parker Stiles
    Flipper/Rehabber · Acworth, GA · Member since 2014 · 246 posts · 92 votes
    6y

    Fantastic response @Troy Gandee.

    0Reply
  • Nat C.
    OP
    Investor · Miami, FL · Member since 2013 · 807 posts · 475 votes
    6y

    @Rich Hill

    James Island is one of the more expensive areas. These areas never have a high cap rate. You’re banking on the appreciation rather than the rental yield.

    Property taxes are fairly moderate compared to the rest of the US, as far as I’m aware.

    Yes, this is a region with the potential for flooding, as well as hurricanes.

    I didn’t need to have flood insurance on the house I owned because there was no mortgage. I remember inquiring once and it would have cost 10k a year. That would have been a killer.

    0Reply
  • Nat C.
    OP
    Investor · Miami, FL · Member since 2013 · 807 posts · 475 votes
    6y

    @Troy Gandee

    Great info Troy. I really appreciate you taking the time to provide so much insight.

    0Reply
  • Michelle Nelson
    Investor · Brooklyn, NY · Member since 2015 · 55 posts · 3 votes
    6y

    @Troy Gandee do you need a STR permit for Category 3 property in Charleston County? Thanks for the help in advance:)

    0Reply
  • John Semanchuk
    Charleston, SC · Member since 2013 · 380 posts · 157 votes
    6y

    Just a few added thoughts... Taxes on non-owner occupied property in Charleston County will be approximately 3x the amount of owner occupied properties.   There's a simple calculator here that will give you a close estimate of what to expect: 
    https://www.charlestoncounty.org/departments/auditor/tax-estimator.php

    Just input the tax district (from tax records) and your purchase price.   Then choose the 6% assessment ratio and you will get an idea of what to expect. (choose the 4% ratio to see the difference)  

    Berkeley County has a similar estimator

    https://www.berkeleycountysc.gov/drupal/dept/auditor/estimator

    As for flood insurance, the only difference between owner occupied and non-owner occupied rates, is $225 additional fee that FEMA adds on. Otherwise costs should be the same for any NFIP insured property. It's important to have an elevation certificate for an accurate quote from an insurance agent. There is also private flood insurance available (ie; Lloyds of London) and if your flood quote is high, it's worth looking into.

    FEMA is supposedly implementing changes to the current flood maps this year and that may change the flood zone designation for any given property. They've been telling us that the change is coming for years now, so don't hold your breath, but it's important to know how a property might be impacted. You can download the preliminary maps from FEMA's site to see what changes may or may not happen. :-/

    Even if you don't have a mortgage and choose not to buy flood insurance, it's important to be aware how much flood insurance costs can impact the value of your property should you ever choose to sell.  

    3Reply
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